On Jun. 25, SK FSC said purchase program will begin Jun. 29, 2020.
SK FSC vice chairman at Korea Asset Management Corporation’s (KAMCO) personal debt purchase program launch spoke regarding importance of inclusive finance.
Signed memorandum of understanding (MoU) so lending institutions may sell non-collateralized defaulted personal debt to KAMCO, which will take over individual debt.
Follows SK FSC Apr. 2020 rules on deferment of principal payment, see #76706.
Although state's KRW 175trn-plus financial support programs helped ease problems of market instability, liquidity shortage, widening income gap must be closely watched.
Job losses and business closures have created extra burdens for many individuals, while asset prices showing signs of instability in the property and stock markets.
Agreement signed by financial institutions intended to help most vulnerable debtors.
Debt Purchase
Deferment of loan repayment program for individual debtors who are incapable of servicing debt due to the pandemic was introduced by government on Apr. 29, 2020.
Under terms of MoU, KAMCO will take over individual debt from lending institutions.
SK FSC said KAMCO will help defaulting debtors with debt adjustment plans.
Bill to be introduced to protect debtors’ rights, prevent severe debt collection methods.
Personal debt purchase program begins on Jun. 29, 2020, for initial duration of 1 year.
In Jul. 2020, SK FSC said 3rd supplementary budget had been passed, see #71555.
Dec. 2022 Extension of Application
On Dec. 27, 2022, SK FSC, SK FSS announced the extension of application period for individual delinquent bond purchased fund, extended until the end of 2023.
Given that SK FSC, all financial sectors, as well as related organizations still need active debt restructuring and recovery support for delinquent individual debtors.
In May 2023, SK FSC issued a plan to improve personal debt takeover, see #174375.
Dec. 28, 2023 Additional 1-Year Extension
On Dec. 28, 2023, SK FSC issued press release re above, to inform of 1-year extension of the personal delinquent bond purchase fund until end of 2023 (i.e. Dec. 31, 2024).
Decision to make this extension was made in consideration of the need to support vulnerable borrowers due to the recent rise in interest rates; this decision was made by the SK FSC, SK FSS, related organizations, as well as the entire financial sector.
SK FSC's announcement also includes details of procedure regarding purchases.
It also said it will, along with related organizations, continue to review necessary policy measures together with financial sector to reduce the burden of delinquent payments on vulnerable individual debtors and support a return to normal economic activities.
Dec. 29, 2023 SK KFB Comments
On Dec. 29, 2023, SK KFB issued brief press release regarding the additional 1-year extension above, and also published a link to SK FSC's press release of Dec. 28, 2023.
